Numbers Matter III - Are You Financially Fluent?

I recently revealed the "The 4 ISO Model Fundamentals " as Financial, Strategic, Mindset, and People. It doesn't matter whether you own a solo cleaning business or a catering company. If you want to grow your company to create the life you've dreamed of, you'll need to master these fundamentals. I am not a caterer... obviously. I can't coach caterers. I can't coach photographers or digital agencies or doctors. I'm a 16-year solo cleaner that has optimized 2 solo cleaning companies to over $50,000 profit per year on 2 cleaning days per week without employees, subs, or drama. I've successfully sold one solo cleaning business for $80,000 and I've successfully scaled another solo cleaning business to allow my family to go to Florida for the month of February the past two years. I have mastered these 4 fundamentals for winning with a solo cleaning business and therefore, I am highly qualified to be your coach if you're looking to master your solo cleaning company.

In that podcast episode, I stated that I wanted to lay out the 4 fundamentals in simple terms first. Then, I promised to follow-up with episodes adding more depth to each. Today, we start with the first one called FINANCIAL. There are thousands of cleaning business owners in Facebook cleaning groups. I have interacted with hundreds and personally coached dozens over the years. The ones I've coached have been side-hustlers, startups, solos, and striving to 7-figures. I have enough data to make this bold statement.

Of the 4 fundamentals of a successful solo cleaning company or any cleaning company, the most lacking skill is Financial Fluency. In my experience (and the combined experience of other reputable coaches in the industry), over 95% of cleaning business owners do NOT know their numbers. They are Financially Illiterate. 

This is scary as these cleaning business owners go year-to-year making jokes about "sucking at math" or "not knowing where they are". It's not funny. It's sad. 95% of you RIGHT NOW are literally treading water and about to drown. You are one bad wave or rip current from financial bankruptcy and you don't even know it. 90% of you are anxious, stressed, and overwhelmed because you don't know where you stand. When you are Financially Illiterate, you are standing on sinking and shifting sand. You have literally nothing firm to build on. So what do you do? You continue to work harder and harder and hope that the money works out. Enter geniuses like Mike Michaelowicz and his book "Profit First". Mike was Financially Illiterate until he took the first step. He went from not-knowing his numbers to knowing his numbers. This didn't make the business any better. But it did allow Mike to place his feet on something firm and something he could build from. His stated mission is to help the millions of us in the same place and to eradicate entrepreneurial poverty.

My friend Ellen was once in this position. She ran a successful cleaning company with 20 team members and close to a half-million in revenue. She did not know her numbers at all and she was the first to admit it. I helped her set goals to over a 3-month period to learn her business through a Profit and Loss Statement or a P&L. Once she understood her P&L, she was able to set financial goals and track her business through a financial dashboard. Ellen has grown quite a bit since this major change. There are thousands of Ellens' out there, so don't feel bad if that's you. We will address all 4 fundamentals over time.

Let's start here. What is Financial Fluency? Think of a language. I was born in the United States. My parents taught me English. I am 100% fluent in English. I took 4 years of German in high school. At my best, I was 25% fluent in German. We have many Spanish families in our church. I am less than 2% fluent in Spanish... No Bueno! How do you learn a new language? You have to study it, yes. From what I've seen over the years, you have to be immersed into the language and given no way out except to learn it. I have such respect for my church friends that came to the U.S. a few years ago and can now communicate in English. They have immersed themselves into English culture. This is exactly how you learn the language of business math. You may be less than 1% fluent in knowing your business numbers right now. That's okay. You stand with millions of other business owners that are in the same boat.
 
Knowing your numbers gives you confidence. It allows you to set realistic goals and track them.

This episode is not meant to be your Financial Fluency test or course. It's your wake-up call like it was for Ellen. I just released my first two exclusive video podcast episodes for the Smart Cleaning School to my Solo Elite Membership. They both focus on Financial Fluency and give 2 great reasons to know your numbers. Here's a sneak peek.

Elite Bonus 01 Break-Even Point – In this bonus episode, I broke down the break-even point. Do you know how many clients you need to get from a marketing investment to make it worth it? Do you know how much a single new client is worth? You need to. How about this? Restaurants know exactly how many diners they need on a given night to break even and not lose money. Ski resorts know how many lift tickets they need to sell. Concerts know how many tickets they need to sell.

Elite Bonus 02 C3 Commercial Bidding & Selling Process – I explained exactly how Josh Melton taught me to bid on new commercial cleaning jobs. It's a fairly simple process, but it can be very difficult until you understand your numbers. First, I invest in keeping excellent bookkeeping records. This allows me to see my current P&L at any point in time. This is vital. I then highlighted my process from the P&L to calculate the cost of C3 selling a single manhour. This includes overhead, labor, cleaning supplies, insurance, quality control, and more. Once I know the cost of a manhour and I know how many manhours a job will take, I can add in a profit markup. This guarantees I grow C3 very profitably and we are!

Here's another great example. I already mentioned having a financial dashboard. Do you know what that means? Have you ever heard the acronym KPIs? It stands for Key Performance Indicators. Think of a thermometer. It takes the temperature of your body. It's over 98.8, there is a problem. 98.8 is a KPI for our body. Our cleaning businesses have KPI's to take the temperature of our business. We should all know the KPIs for our employee and client retention, sales conversion, employee hiring conversion, profit margin, and more. I have a financial dashboard for Solo Elite Members. It's called the ISO Model Scorecard. It measures the KPI's for the optimizing solo cleaner such as profit margin, family budget, cancellation rate, average hourly rate, trust factor, peace factor, and ISO Model Score. This dashboard informs the Solo Elite Member at any point WHERE they are in relation to their goals. We can then set SMART goals to get to the next milestone. By definition, you can't have a SMART goal without knowing your numbers, being Financially Fluent, and having a dashboard. The "S" and "M" stands for specific and measurable. These two require numbers! Hello!? How do you think I optimized my first solo business to $60k profit on 2 cleaning days per week? How did I sell that solo company for $80,000 with interest? How did I build a second solo business to $70k profit on 2 days per week? How did I scale that one to 6-figures with a team of 10 and go to Florida twice for a month each with my family? Yes, I have a great STRATEGY and MINDSET. Yes, I'm great with PEOPLE. My greatest strength is that I KNOW MY NUMBERS. I know how to take the temperature of my business, set SMART goals for the next milestone and CRUSH it!

It's time for you to stop making excuses and take a FINANCIAL LITERACY test. If you're a solo cleaner, you need the ISO Model and the Solo Elite Membership! You can optimize your solo cleaning business to earn over $50,000 profit cleaning less than 20 hours per week without employees or subs or drama! Get access to this game-changing training for only $57 per month or $597 per year in the Solo Elite Membership atsmartcleaningschool.com/elite. Members get access to the full ISO Model Course to optimize your solo business, plus access to the Solo Elite Community, bonus podcast content, access to private coaching and additional courses at 50% off!

Today's episode was brought to you by Swept Janitorial Software. Would you like to streamline your scheduling, supplies, quality control, and employee management in your commercial cleaning business so you can have more time to work on building more profit? Check out the Smart Cleaning School's Swept Exclusive Deal. Get access to Swept for 30 days for $30 ($245 savings in the first month)! That's awesome. Just go to smartcleaningschool.com/resources and you'll find our partner deals about halfway down the page. Check out my testimonial once you click through. There's a video on there that shows my Florida Swept testimony. Swept helps me track KPI's big time! If you have a commercial cleaning company of any size, get Swept now!